New car sales continue to grow

New car sales continue to grow in 2014 with a strong start to the 142 registration period.

Sales in July (18,776 ) saw a 61 per cent increase on the same month last year (11,620 ), the first year of the new dual registration plate.

July 2014 was the best July on record for vehicle registrations. So far this year, 84,474 new cars have been sold, an increase of 30 per cent (19,571 ) on 2013 and 10,000 more cars than were registered in the whole of last year.

Heavy goods vehicle registrations are also up 40 per cent for the month and 44 per cent for the year to date, while light commercial vehicle registrations (vans ) also increased significantly, by 97 per cent in July and by 46 per cent for the year to date, compared to last year.

Commenting on the results, Alan Nolan, director general SIMI, said: “We have to be positive about these figures, which are even stronger than we expected. When SIMI proposed the introduction of the split registration system, we predicted that it would give consumers and businesses a better choice in buying their new car mid-year rather than during the busy first quarter.

“We had hoped that if sales in the first quarter of the year were bad, the new plate would give a second chance for a recovery. Last year, July saved what had been a very poor first half, due to the VRT and road tax increases. Looking at the commercial vehicle and hire-drive numbers, it is clear that both retail and business customers see the benefits of the new system.”

Last year, July represented 18 per cent of the year to date registrations while this year it has grown to 22 per cent. In the final year of the old system, 2012, July represented only six per cent of the year to date registrations.

Although there is more business confidence and the outlook remains quite positive, the industry still remains cautious. The industry is only at the beginning of a long recovery process, starting from a very low base, which makes the percentages look very high. In reality, there are still challenges, both in the availability of business finance and in the fragility of the market, which could easily be upset by any negative decisions in the budget or instability in the economy.

The industry has been working hard to build on the improved consumer sentiment and increased consumer spending. It has been absorbing costs and investing in driving the market with strong offers and strategic registrations, that then find their way to consumers as a value purchase.

All of this has helped to aid recovery and despite the positive outlook, the industry must remain cautious about anything negative that could reverse this growth. So the clear message to Government is not to do anything negative that could risk the additional €200 million collected this year and the potential for a further €150 million next year from new car sales.

The prize for the Exchequer in supporting this recovery will be the potential to collect €1 billion from new car sales in two years’ time and this should not be endangered.